Archive for the ‘Solar’ Category

Turning On Solar Thermal Power

Monday, December 22nd, 2008

An interview with Dr. David Mills, Chief Scientific Officer and Founder of Ausra:

Dr. David Mills has worked in the alternative energy field for over 30 years. He was born and raised in Canada and educated in Australia. In his University of Sydney lab he developed and licensed the evacuated-tube solar water heater technology, which consists of about 60 percent of the world’s solar collectors and created an advanced double cermet selective absorber coating, which is used in tube receivers by Chinas largest solar company. He also invented or co-invented the Prism solar concentrator (Sol X) and the S evacuated tube reflecting system (Solahart). He’s saved his best for last however, with his pioneering Compact Linear Fresnel Reflector (CLFR) technology, which is what is presently being manufactured for utility-scale thermal solar power.

Solar thermal uses fields of special mirrors to shine the sun’s energy on water-filled piping, which then boils and turns it into steam to run turbines that produce electricity. There is no pollution or use of photovoltaics (solar panels). This technology is literally changing the way our planet will supply its every increasing need for energy free of fossil fuels or dangerous by-products. It provides green jobs, helps stop global warming, is cost effective and can be on the ground running within the next few years. All of North America and Europe’s electrical power needs (day and night) can be generated with this system, by using a desert land area less than 92 by 92 square miles. The parts for solar thermal power plants will soon be available for the world’s leading polluters (China, India, Europe and the U.S.), as well as other continents.
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Ausra’s revolutionary solar field design consists of several mirrors sharing a receiver. This lowers the cost of the mirrors while greatly reducing overall plumbing required.

Dr. Mills and his company (Ausra) have already signed contracts with one of the largest power companies in North America (Pacific Gas & Electric) to deliver 177 megawatts; are building the first U.S. manufacturing plant for solar thermal power systems in Las Vegas, Nevada; and plan on having a pre-commercial demonstration project up and running by the end of this year. One of the other largest utility companies in The States (Florida Power & Light) and its parent (FPL Group), have also taken a close look at Dr. Mills solar thermal technology. Their chairman and CEO, Lewis Hay, states, “As the operator of the largest solar energy facility in the world, we view this breakthrough technology as a promising option.”

I recently interviewed Dr. Mills at Ausra’s headquarters in Northern California. He shared some of his thoughts and insights about the environment, our energy needs and the quickest way to transform our fossil fuel economy to a solar and all-electric society.

Gabriel Constans (GC): It appears that the technology you are using at your present and future power plants can literally change the world and the way it obtains its energy needs. Do you realize that you are someone who, in many respects, could be seen as one of the great scientists and innovators of the century?

Dr. David Mills (DM): This kind of technology will certainly change how we produce and generate energy. This technology can be the big gorilla of generating energy. Presuming the electrified auto sector, it will soon be electricity and oil, not the other way around. There are already 3 battery companies that have batteries which can recharge electric car batteries in minutes. If you put that together with generating technology which is readily available on the grid, you have the ingredients to say we don’t need oil anymore, we don’t have to import oil.

GC: Is there enough private, organizational and government interest to adopt this technology?

DM: These things are world changing in many ways. The common term would be disruptive technology. It isn’t necessarily that way, in a negative fashion, but it does change things. It is positive disruption, though there will be winners and losers. If you look at the rail traffic in the U.S., 80% of it involves carrying fuel. If you don’t need it to carry fuel anymore, than you’re going to have to re-evaluate that industry. On the other hand, if you look at glass (used for solar reflecting mirrors, parts and tubing), it will probably double or triple that industry. Steel will stay about the same, but turbine production will be bigger than ever. There will be a lot of impacts on the economy, but in the end, in terms of employment and energy efficiency, the economy will be a superior economy.

GC: At what point are you in the process? When will you figuratively turn on the switch?

DM: We have developed a proprietary system to store energy. We’ll be developing and demonstrating this storage unit at a pre-commercial test facility in California this year. We anticipate that we’ll have energy storage commercialized by 2010. Having a turbine built and delivered is presently between 2-3 years. It’s the turbines which may cause some delay, not the know-how or technology. Similar companies, (such as Sterling) are facing the same issue. What convinces people is a plant on the ground. One can wave their arms around a lot at conferences, but the real deal is to have it working, having it connected to utilities and having it operating reliably. At that point people will get it.

Dr. David Mills

GC: How is thermal solar technology being accepted in the rest of the world?

DM: The entire field is going to progress very quickly. The greatest development is taking place right now, especially in the U.S. In Europe that isn’t so much the case. They set up a system called “feed in law” which is giving a comfortable amount of income to companies. They could continue to take the old designs and run with it for security. Here (in the U.S.) the market is tougher and more competitive, which means costs are kept down, so were seeing real development going on here. In my opinon, they aren’t lowering the feed in laws fast enough in Europe. For it to work around the world, you have to set up parallel corporations that can be competing in markets using these technologies. There are already other companies in the U.S., as well as other countries and companies that are interested. This will happen, but to manage this great of growth is going to be a serious challenge. There are many places that need electricity for social betterment, but social betterment is not the same thing as environmental rescue. They both have to be done. It’s a matter of prioritization.

GC: How did this all come about?

DM: I came up with this design and system independently, but once I did research I discovered that at least 2 other groups had attempted to go down this path before. One in the 1960’s built a small unit, including an Italian that built one in Southern France and another in the U.S. that tried but didn’t get very far with funding. We basically resurrected the idea. Other companies that are doing similar projects descended from us in one way or another. They’re all people that were involved with us or came in contact with us.

GC: What will it take to get power from companies using solar thermal technology to the public?

DM: We don’t have to put in an entirely new infrastructure for this technology, in the short term. In about 10 years you’ll get to the point were you need new power lines and new cross-continental low-loss DC lines to get that power to heavy population centers, like in the North East. People are going to have to get used to the idea that just like we have a trans-continental highway system, we need a trans-continental transmission system. Similar discussions are going on in Europe, such as the transmission of power from North Africa into Europe. We can build these things very quickly. What is generally the limitation is the present infrastructure, which people tend to like to run until it dies. Most of the existing plants will be gone in 40 years. If we decide on a Marshall Plan for energy, it’s possible to have it completed in 25 years. It would have to be global and would be the biggest thing ever. It would be an infrastructure that benefits everyone all the time. No matter what happens, its going to be a profitable exercise for people.

GC: Aren’t people reluctant to trust large corporations and power companies? Isn’t that why there has been such a push over the last 20 years for people to be independent and to have individual sources of energy for their own home or business?

DM: People sometimes confuse their dream of autonomy and independence from utility payments with the desire to be free of entanglements. The fact is, our economy involves a lot of people, a lot of transport, there is a lot of industry and community activity that goes on. It isn’t just an individual home owner off by themselves. The home is not the major part of electricity consumption or source of pollution. We shouldn’t be afraid of a utility scenario. From a practical point of view, it’s easier to put in a number of large plants very quickly, compared to convincing everyone individually that this is a good idea. In the end, both kinds of societies are possible, but I think this one can go much more quickly. It’s not to say the small scale won’t work, it’s simply a matter of time. Right now, we can change the amount of green electrons flowing through everyone’s circuits instead of a few. The source will be different, though the electricity is the same and we don’t have to change a lot of infrastructure. People shouldn’t be afraid of the large utility companies just because they’re large.

It only takes about 92 miles by 92 miles of a solar thermal plant to fulfill the energy requirements for North America and Europe. That’s not big. That’s smaller than a mining footprint for coal. It’s a benign system. People living next to this type of technology don’t mind them. We’re finding its more acceptable than wind power. Thermal solar power already exists. We can also store the energy created, so it carries us throughout the year and in all kinds of weather. It’s possible here and now and throughout the world.

Epic Correction Leads to Depressed Solar Sector

Wednesday, November 5th, 2008

How epic has this correction been? The answer is worse than the 1987 programmatic crash (S&P -32%) but not as bad, to-date, as the 1973 oil crisis (S&P -48%) or the dot-com bubble (S&P -49%). For an excellent graphic of these events and the current housing bubble (S&P -45%) visit CalculatedRisk.com. In this graph each of the indices starts at the same point on the top of the vertical axis, which represents the percentage amount of drop in index value. With the horizontal axis representing time, it can be seen that while the percentage drop of the S&P 500 is not quite as severe as in the case of the corrections of ‘73 or ‘00, those corrections took 2-3 years to hit bottom. We are less than one year into this correction and the S&P is down 44%.

For sustainable energy the correction to-date has been even more severe. Our graph from the October 7, 2007 S&P 500 peak to the end of October 2008 shows the changes to the four sectors we have been tracking since the S&P peak. At their minimums the four indices were down between 65 - 80%.


CAMINO INDICES VS. S&P 500
Camino Renewable Energy Indices vs. S&P 500 for the period
9-07 through 10-31-08. Camino’s solar index is down 60%.
(Copyright: Camino Energy)

The month of October was particularly bad for sustainable energy where 100% of the companies in our indices had negative returns.


CAMINO’S RENEWABLES INDICES - LAST 30 DAYS THROUGH 10-31-08
Down 32-85% in one month, Camino Renewable Energy Indices
performance for the period Oct. 1st, 2008 through Oct. 31st, 2008
(Copyright: Camino Energy)

So what am I optimistic about? Simple, I’m optimistic the sustainable energy industry will continue to exist and at some point prices get so low that the stocks represent attactive buys. I think this is particularly true for solar as the statistics below show for 10 of the US traded companies I track in the Camino SOLAR index (detail here).


CAMINO’S SOLAR INDEX - TOP TEN AVERAGE RATIOS
Earnings growth would have to fall dramatically
for Caminos’s top ten solar stocks to not be good buys.
(Copyright: Camino Energy)

SOLAR growth rates would have to slow dramatically to make the companies overpriced at current levels. Even if their earnings growth slows by a factor of 4 these ten companies would still be fairly priced. And I don’t see many reasons to expect such a slowing. Modules prices are expected to fall which should boast sales and improve customer ROI. Retail electric prices are virtually unaffected by oil prices in many economies so the basic economic benefit of solar isn’t going away. Subsidies are locked in in the US. Financing should be available with the massive governmental pushes to create liquidity while lowering rates. And the technology continues to improve further driving down costs and improving solar’s competitive position.

There may be other bargins in the sustainable energy sector but the solar sector is a good place to start with plenty of potential investment targets.

Mark Henwood is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks.  Disclaimer: Henwood has positions in JASO, SOL, CSIQ, STP, SOLF, and LDK.

Renewable Electricity Dominates California Utility Plans

Monday, October 20th, 2008

On Thursday 10-16-08 I attended the User Group meeting of Plexos Solutions LLC, a boutique firm providing software and consulting to the rapidly changing California electric market. One of the presentations covered issues surrounding integration of renewable energy resources into the California Independent System Operator (CAISO). This is important to sustainable energy investors because virtually all the growth in generating capacity is forecast to come from renewable resources. While the fundamentals of this market have been overwhelmed by broader market conditions this last month, over time the fundamentals provide the tailwind that will lift stocks. And the growth expectations for renewables are very high in the California market.

Over the period 2007 - 2012 the CAISO is planning for increases over existing capacity of:

5,053 MW of wind, a 187% increase,
1,064 MW of geothermal, a 68% increase,
946 MW of concentrating solar, a 203% increase,
508 MW of utility scale PV solar, a 2,032% increase, and
221 MW of biomass, a 28% increase
These are huge numbers representing billions of dollars of projects and electric revenues. Striking are the growth expectations for the two main solar approaches.

The ISO Control Room in Folsom directs the flow
of electricity and ensures access to 25,000 circuit
miles of high-voltage, long distance power lines.
(Photo: California ISO)

In the concentrating solar sector, the state currently has 354 MW of large projects operating with the last one completed in 1990, 18 years ago.

Most of this capacity is owned by FPL Energy, part of a large regulated utility. So the new capacity has to come from a sector that hasn’t, in California at least, been able to construct a project for many years. Equally noticeable it the paucity of publicly traded companies in the concentrating solar sector. Solar Millennium (S2M.DE) is one the few with significant concentrating solar activity.

The state currently has 8 projects with 3,689 MW of large concentrating solar projects in the permitting pipeline. But these numbers are deceptive. Of the 8, two projects are actually “solar/thermal” hybrids like the existing operating projects. These two projects represent 1,180 MW of capacity with 112 MW attributable to solar. The remaining 6 projects are a gamut of technologies ranging from troughs, reflectors, towers, and Sterling engines. These projects are all owned by private companies or municipal utilities and currently don’t present an opportunity for public market investors.

The PV solar sector provides more avenues for public investors to participate via investment in the PV supply chain. If the numbers work out the utility market represents a multi-year, very large opportunity. Let’s take a look.

As of the end of 2007 California had an estimated 279 MW of installed PV in homes and businesses and 25 MW of utility scale projects. This makes sense since the home and business markets are net metering against retail rates whereas utility scale projects have to compete against wholesale markets. So the premise is that PV solar is now becoming sufficiently competitive at the wholesale level to install over 500 MW in the next 5 years.

One of the first test cases was recently announced. On July 10, 2008 the California Public Utilities Commission approved a 7.5 MW contract between First Solar’s (FSLR) FSE Blythe project and Southern California Edison. Unfortunately much of the economic information was not disclosed but some key data can be gleaned from the record. First, the company is projecting an excellent 27% capacity factor for the project, significantly higher than typical estimates for PV projects. But equally important is the company is pursing the development receiving a price at or below the “market reference price” which is based on a highly efficient modern thermal plant. After accounting for some messy seasonal and time-of-use factors I calculate the project will receive approximately USD 0.14/kWh on average plus a 30% tax credit now that the Emergency Economic Stabilization Act of 2008 passed. If First Solar can make money at this project then they are very near the holy grail of grid parity (at least until the credit expires December 31, 2016). And the utility systems can, according to the CAISO, absorb large amounts of solar power for years to come. Game on.

Mark Henwood is the founder of Camino Energy, an information provider specializing in globally traded sustainable energy stocks.

Bangladesh’s Solar Energy

Saturday, January 19th, 2008

by Gordon Feller, Urban Age Institute, January 18, 2008

Bangladesh has made impressive economic and social strides over the last two decades. It has achieved steady economic growth of around 5% annually, with relatively low inflation and a stable fiscal situation. Population growth and infant mortality rates have declined and primary school enrollment rates, particularly of girls, have improved dramatically. The rate of growth of per capita GDP has improved from less than 2% during the 1980s to over 5% during 1995-05.

Despite these substantial gains, a large unfinished agenda remains in terms of attaining the MDGs, which would require an acceleration of the economic growth rate to 6-7% per annum. Accelerating growth would also require substantially higher levels of investments in infrastructure, with a particular emphasis on the rural areas where the vast majority of the Bangladeshi population lives.

While infrastructure in the rural areas has improved, particularly for water supply and roads, Bangladesh has a particularly high demand for expansion of rural electrification services. Factors such as remoteness, inadequate load demand and resource constraints for expanding the power infrastructure are major barriers to electrification in the rural areas.  These areas currently use kerosene and diesel for their lighting and electricity requirements.

At present, about 38% of the Bangladeshi population has access to electricity and per capita electricity consumption is about 133 kWh which is one of the lowest in the world.  Nearly 75% of the population is rural and only about 30% of the rural households have access to grid electricity. The current rate of expansion in electrification is only about 400,000 new households gaining access every year and at such rate it would take more than 40 years to reach all households. Rural electricity access rates have to increase dramatically to accomplish the Government’s stated goal of providing universal electricity access by 2020. Government has encouraged implementing off-grid renewable energy technologies, such as solar home systems (SHS) and micro-wind power systems in coastal areas, and mini-hydro projects in the mountainous regions as a priority.

Presently, three state-owned utilities under the Ministry of Energy and Mineral Resources are responsible for electricity development in the country. These are:

i) Bangladesh Power Development Board (BPDB), responsible for generation and transmission of power in the country and distribution in urban areas, except the area under Greater Dhaka,

ii) Dhaka Electric Supply Authority (DESA), responsible for distribution of electricity in the greater Dhaka area including the metropolitan city of Dhaka; and,

iii) Rural Electrification Board (REB), responsible for distribution of electricity in rural areas through a network of more than 60 Palli Bidyut Samitis (PBSs) or rural electricity cooperatives.

Government strategy emphasizes promoting off-grid options in areas that are unsuitable for grid expansion. It has made a good start by eliminating import duty on SHS in April 2000. The strategy emphasizes the pivotal role of well functioning rural systems for the Government’s off grid promotion strategy and endorses the approach to use well-functioning rural community based organizations (CBOs) to leverage grass-roots reach and establish credibility to improve electricity provision significantly.

The objective of this Clean Development Mechanism (CDM) project is to contribute to sustainable development through the provision of renewable solar electricity to households not connected to the electricity grid and thereby reduce the Greenhouse Gas (GHG) emissions by displacing kerosene and diesel use for lighting and off-grid electricity generation.

The project will contribute to the sustainable development of Bangladesh with a particular emphasis on the rural population, which is generally poorer.  In addition to reducing GHG emissions, the project would have significant other social, economic and environmental benefits.  Bank’s involvement in supporting this project is therefore considered highly appropriate.

The project envisages installing 929,169 SHSs all across Bangladesh between 2007 and 2015.  The SHS will provide facilities for lighting, TV and radio and comprise of: (a) a Solar Module (10 to 120wp); (b) battery ( 47 Ah to 130 Ah); (c) Charge Controller; (d) fluorescent tube lights with special electronic ballasts; (e) mounting structure; (f) installation kit; and (g) cables and connecting devices. The capacity of individual SHS will vary according to consumer choice and demand. The cost of SHS would be recovered through monthly instalments over a period of up to 4 years which will be within the affordable capacity of the targeted consumers.  Upon full implementation in year 2015, the project activity will replace 20,075 kilo litres per annum of kerosene usage, equivalent to an emissions reduction of 48,380.75 tonnes CO2 per annum and 16,600,500 KWh/ year of electricity generation using diesel generators.

The project will be implemented by Grameen Shakti (GS) which develops, introduces and popularizes renewable energy technologies for sustainable energy solutions, particularly Solar PV systems, aiming to reduce poverty, improve living standards and protect the environment.  Over the last decade GS has installed about 77,000 SHS with combined capacities of 15.8 MW and more than 1,650 SHSs are installed each month.  It has also set up 120 offices for service delivery and performance monitoring, and has a research unit for improvement of the overall efficiency of the system and ancillaries. GS is currently serving more than 275,000 beneficiaries through its 120 offices spread over 58 districts of Bangladesh.

About the Author: Gordon Feller is the CEO of Urban Age Institute (www.UrbanAge.org). During the past twenty years he has authored more than 500 magazine articles, journal articles or newspaper articles on the profound changes underway in politics, economics, and ecology - with a special emphasis on sustainable development. Gordon is the editor of Urban Age Magazine, a unique quarterly which serves as a global resource and which was founded in 1990. He can be reached at GordonFeller@UrbanAge.org and he is available for speaking to your organization about the issues raised in this and his other numerous articles published in EcoWorld.